Software-as-Service as a disruptive trend and how it affects the traditional, ISVs and IT moving to the Cloud.
Considerations in the transition to the new model and expertise on SaaS Service Operations - STORM™ and DevOps

Wednesday, November 28, 2012

IT and the Cloud – the 'Value Paradox'

Cloud influence on IT activity and the changing role of the IT manager.

On Paradox - “If you try to fail, and succeed, which have you done?” ― George Carlin

I know what IT did last summer
Since the advent of packaged software , IT staff spent a great deal of their time making software available to their internal customers. What did that entail?

Comparing optional vendors and offering

Procurement – negotiating and finally purchasing the software

Designing and customizing the solution

Securing the hardware and installing the software – sometimes this would take months to purchase and install the servers, operating systems and the software.

Testing the environment and the software

Deployment and training

Maintenance – expanding resources, upgrades, etc.

All this work revolved just around ‘keeping the lights on’, and IT was usually understaffed with tasks continually piling up.

While it was crucial to have the software up and running', IT could not devote the necessary attention to derive more value from the application, because just making the application available exhausted what little time and resources IT had at the end of the day.

Shift of Focus
In the world of SaaS - Cloud applications – many of these tasks are becoming extinct.

Procurement is done in many organizations by the business manager, and even if IT is involved, the decision is usually made by the Line of Business manager.

Securing and installing hardware is no longer needed, and neither is installing the software and testing it.

Maintenance is usually non-existent or negligible as well as deployment.

Training is also downshifted as most SaaS applications are designed for simplicity and intuitiveness.

In the Age of Cloud, IT is shifting from Managing Software to Managing Applications - As SaaS applications take a larger share of the companies’ portfolio , IT will have less “traditional” tasks, and therefore more time to concentrate on bringing value to the business.

What value would that be?

Performance – a better end-user-experience, understanding when and where and for whom the application is not delivering acceptable response times.

Subscription management – save the business unnecessary expenses by ensuring the right number and level of subscriptions were purchased (e.g. don’t continue to pay for employees that have left the company, or don’t pay premium subscriptions for users that are utilizing only the basic functionality)

Application utilization – discover usage pattern, optimize the usage, ensure that the applications are being used in the way they were meant to, point out where training may be needed. Know how the application is used, by whom, when and where from.

The Value Paradox
Herein lies the paradox - On one hand, the cloud enables IT to start focusing on the important stuff ( bringing true value to the users and aligning itself with IT), but on the other hand, because of the Cloud’s ‘cloudiness’, IT cannot deliver the benefits since it has no visibility into what’s going on.

The CIO has a debilitating blind spot when it comes to monitoring Cloud applications. All the communication in SaaS is done between the end user and the service provider. All traffic flows between these end points without IT having any visibility of who is using what, when, from where, how and how much.
There are a number of tools available on the market that, although not designed for this particular challenge, provide partial information on various aspects. They include SSO, Synthetic transactions, APM, License management and log analysis.

For example, Symantec recently released O3 Gateway while Salesforce is now delivering Identity Force SSO. Both solutions may provide a limited view of some of the knowledge needed.

Each one of the solutions above can give some visibility into this dark matter, but In order to resolve the “Value Paradox” a new generation of tools will be required and they will need to be simpler, less costly, insightful and better fitting for the SMB market.

About Me

Founder and CEO of the Israel SaaS Center (ISC), guiding ISVs and IT departments in the successful transition and adoption of SaaS.
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Strategic and Technical SaaS Expert.
A veteran in the software industry in startups and enterprise ISVs.
Held development, management and executive roles in multiple verticals and geographies.
BSc. in Computer Science from the Hebrew University and MSc. in Artificial Intelligence from the University of Edinburgh.
Expert and thought leader in SaaS Operations and ISVs transition from on-premise to on-demand.
Co-authored the book "CIO Perspectives" (Kendall-Hunt, 2007) contributing the chapter on SaaS.
Currently writing the "Survival Guide for SaaS Service Operations".
Writer, presenter and panel member/moderator in multiple SaaS events.